Physicians Can Help Cut Costs. They Just Need the Right Incentives. (Harvard Business Review)

Physicians play a critical role in hospital finances through their decisions on treatments, technologies, and resource use. However, only a few health systems currently align physician incentives to manage costs effectively. This article outlines key principles for creating incentive programs that empower physicians to cut costs while maintaining high patient outcomes.

Incentives can be broad, focusing on managing the overall cost of procedures, or narrow, rewarding physicians for specific cost-saving actions like switching to lower-cost supplies. Broader incentives offer more autonomy and allow physicians to find innovative ways to reduce costs without compromising care.